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US-China Relations

China’s Vice Premier’s Statement on Trade Negotiation Differed from Joint Statement the White House Issued

In an article Xinhua published on May 20, Liu He, the Vice Premier of China, told the media that the biggest achievement made during the trade negotiation between China and the U.S. was that both parties reached consensus on not engaging in a trade war and on not imposing tariffs on imports. However, a news article Duowei published reported that Liu He’s statement differed from the joint statement that the White House issued. It said that even though China and the U.S. reached an agreement during the trade negotiation, the joint statement didn’t clearly mention that both sides would give up imposing tariffs.

1. Duowei, May 19, 2018
2. Xinhua, May 20, 2018

Duowei: Trump’s Miscalculation in the ZTE Crisis

Duowei News, a Pro-Beijing Chinese media in the U.S., published an article commenting on U.S. President Trump’s change of attitude toward the Chinese tech company ZTE Corporation. Below is an excerpt from the article:

On May 13, Trump said on Twitter that he is working together with Chinese President Xi Jinping to resolve the plight of China’s ZTE Corporation. In response, the Chinese Ministry of Foreign Affairs answered on May 14, saying that China appreciates the positive attitude of the U.S. on the issue of ZTE Corporation and is maintaining close communication with the U.S. on the implementation of specific details. Indeed, this tweet suddenly showed an appearance of goodwill toward ZTE. However, if we review the entire ZTE event, we can see that this “play” performed by Trump has ulterior motives. The ZTE incident itself is not a trade issue, but it was forced to wear a trade war hat because of the timing of the U.S. review.

The Chinese Ministry of Foreign Affairs “appreciated” this (Trump’s reversal of ZTE’s punishment). Trump could use it to tout his ability to “be able to make friends with China and protect the interests of the United States at the same time.” However, Trump’s “miscalculation” lies in the structural contradiction between China and the United States. Whoever laughs until the end is the one who laughs the best. The so-called “China-U.S. trade war” continues to this day. The issue of trade between China and the United States is no longer the core issue. The prominent structural contradictions will be the biggest crux of Sino-U.S. relations for a considerable period of time into the future. This “war” is a protracted war. It not only requires strength but also patience. From the first severe punishment to the sudden change in the attitude of the United States, it will not be so important whether it will eventually bring about the rebirth of ZTE. What is important is that this move of the United States completely awakens the Chinese scientific and technological community. Due to the economic take-off and some achievements in the field of science and technology, many people in China have indeed forgotten that there is still a huge gap remaining with the United States. The issue of “China Chip” has exposed China’s problem of independent research and development. It has become a catalyst for China’s scientific and technological research and development.

After the ZTE incident, not only did China’s official media People’s Daily surprisingly express that China had to “increase chip investments at all cost.” Xi Jinping also emphasized in the inspection tour in Hubei at the end of April that “we must speed up major breakthroughs in chip technology.” We must “climb to the peak of semiconductor storage technology in the world.” In his newly published book, “Xi Jinping’s excerpt on the overall national security concept,” he recorded “winning the battle of science and technology” as one of the most important issues.

If Trump thinks that “hitting a slap, then giving a sweet date” is a way to make Chinese companies give in, then he may be wrong. Even if the ZTE problem can be resolved with his help, Chinese companies will certainly continue with the sense of crisis and urgency at this moment. They will no longer be willing to have others control them in the area of core technology because the ZTE event allows them to understand that this can determine the company’s life or death.

Source: Duowei News, May 14, 2018

Zhu Chenghu: China and the United States Will Compete in Three Areas

Major General Zhu Chenghu, former deputy director of the Institute of Strategic Studies, National Defense University of China, wrote an article commenting on the competition between China and the U.S. In the article, he stated:

“The pattern of Sino-U.S. relations is based on a comparison of power between China and the U.S. The overall trend regarding Sino-U.S. power is the contrast between China’s rise and the United States’ relative decline. At present, this trend remains the same. Moreover, for a long time into the future, it will not change.

“We can see that Trump’s series of international claims, including the forthcoming North Korea-U.S. talks and the launch of a tough policy involving Taiwan, are all preparing for a second term. Therefore, during this period of time, Sino-U.S. relations are not very pessimistic. That is because Trump is a businessman who cares about interests the most. There are too many interests to be exchanged between China and the United States. However, seven years ago, the author expressed a not so optimistic view about Sino-U.S. relations. Now, from a long-term perspective, it is even less optimistic. The showdown between China and the United States is the general trend. Judging from this, the future competition between China and the United States may be concentrated in the following three main areas.

“First, the Taiwan issue will become very prominent. “For the settlement of the Taiwan issue, China has far more means than it had in the past and the current leaders’ determination is much stronger than it was in the past.

“Second, there are both apparent and insidious issues in the security field.“ In addition to considerations about Taiwan, the more important security issue is the Korean peninsula. In this regard, everyone can calm down and maintain one’s cool. This is an issue in which no one can get a result from talks. With regard to the highly regarded DPRK-U.S. summit meeting, the difficulties that the two sides actually have to overcome are unimaginable. The main goal of Trump’s gesture is still to prepare for the general election.

“The last issue is the South China Sea. At present, there is only so much that the United States military can show. We have yet to see further provocations. However, there is a hidden problem in the field of security that cannot be ignored: the arms race between China and the United States.

“The Chinese are often not willing to use the term but this is an objective reality. Since the 1996 Taiwan Strait crisis began, an arms race has been going on between China and the United States. In this regard, China must choose its direction and focus on its key points. That is, China has enough means available so the United States will not dare to intervene in the conflict in the Taiwan Strait. There is no reason for China to compete with the United States to seek superiority. This is also impossible.

“Third, actions behind the scenes in the financial sector are the most worrisome problem.

“The most important thing for Sino-U.S. competition in the financial sector is the internationalization of the renminbi. What Americans worry about the most right now is not the trade issue.

“The internationalization of the renminbi is a fundamental challenge to the United States. Therefore, on this issue, China must make enough ideological preparations. Also, in the process of expanding China’s overseas interests, it needs to be adequately prepared. This is a challenge involving geo-strategic patterns and will exist for a long time.”

Source:, April 12, 2018

China Finance Online: ZTE Issued Internal Memo Disclosing Progress of Recovery Effort

China Finance Online, China’s only online financial information service listed on NASDAQ, recently reported that ZTE issued an internal memo to its staff on the status of its recovery effort after the U.S. government banned American companies from exporting critical supplies to ZTE. The memo said the company was seeking a stay of the U.S. government ban and was “actively communicating” with the U.S. regulators by submitting additional supporting compliance materials. The memo emphasized that, ever since the U.S. ban, “as a globalized enterprise that grew in China,” ZTE has “strictly aligned with China’s national strategy.” The company has been actively taking steps, “firmly under the guidance of the Chinese government,” in order to “resolve the issues quickly.” The memo was issued immediately after the completion of the US-China trade negotiation between high ranking Chinese officials and the U.S delegation in Beijing. Taiwanese high-tech chip maker MediaTek just received clearance from the Taiwanese authorities to resume shipment to ZTE in a few weeks.

Source: China Finance Online, May 5, 2018

Huanqiu: Do Not Boycott U.S. Goods

Huanqiu, which is a subsidiary under People’s Daily, published an article asking the Chinese people not to boycott U.S. goods. This represents a rare positional shift for Huanqiu, which, since last month, has taken a hard line against the U.S. on the trade war between the U.S. and China.

The article stated that the American media have claimed that China has an ultimate weapon against the U.S., which is to mobilize the whole nation to boycott U.S. goods. “However, it could be a trap to hurt ourselves.”

“There is no ‘winner’ in a trade war. Each party tries to minimize its losses. That’s why China does not want to have a trade war and also why many U.S. main-stream media are against Trump on this.”

“American companies are already tightly integrated into China’s economy.” “They also play an important role in China’s economic and technology development.” The article concluded that boycotting American companies and goods will hurt China’s economy and factories.

Source: Sina, April 22, 2018

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